The City of Victoria has approved tougher rules for short term vacation rentals, including those offered by online hospitality company Airbnb.

The regulations passed Thursday evening apply to units within transient zones. These are areas, such as the downtown core, where hotels, motels and bed and breakfasts are allowed to operate.

Rentals of 30 days or less will only be allowed in primary residences. Only one or two bedrooms may be rented out on a short term basis, and self-contained units in basement or garden suites will not qualify.

Operators will also need business licences, which will cost between $200 and $2,500, depending on the unit.

A grandfather clause stipulates property owners who already legally rent out short term units as a business will be allowed to continue.

Need for regulation

Councillor Ben Isitt introduced the motion.

"We need to bring some regulation to this industry that has so far operated outside of proper regulation," he said.

Isitt says given the city's current housing crisis, he'd like to see many of these units return to being long-term rental homes.

"These buildings were built, approved in this chamber, with people believing they were going to be ordinary, residential condominium buildings," said Isitt.

"We've found these buildings have evolved into something very different."

Councillor Geoff Young says he supported the changes reluctantly, because the issue needs to be looked at in greater detail.

Young says he voted in favour out of concern for fairness between all types of temporary lodging.

"You should be paying the same kinds of property taxes, the same kinds of sales taxes, the same kinds of tourism taxes, whether it's a one room hotel or a 500 room hotel," said Young.

The only dissenting vote came from Coun. Marianne Alto. She says she agrees with many of her colleagues' views but isn't convinced a "broad, heavy brush" approach is the right solution.

"I think there is a bit more nuance required," said Alto.

Businesses opposed

Some commercial operators are speaking out against the new regulations.

Nancy Paine owns Spacehost, an online service that manages 37 short term rentals in Victoria.

"They're putting the onus of the availability of rental stock onto private property owners," said Paine.

"And that's really not our problem."

Paine says many of her clients are families who use income from short term rentals to pay mortgages and bills.

The city says about 1,500 units are currently listed as short term rentals in Victoria. It says licence fees will help pay for more staff and a third-party agency to monitor websites for compliance.

The new rules are expected to come into effect early next year.

With files from CHEK News